Hungary’s new inflation target: what changes in 2028?

On September 22, the MNB decided to set its inflation target at 2.5% from January 1, 2028, retaining the symmetrical tolerance band of ±1 percentage point. The target describes the medium-term rate of price growth the central bank seeks; it is not a guaranteed inflation reading.

The objective is different from the instrument. The separately published September interest-rate decision left the base rate at 5.50%. The new inflation benchmark and the current rate answer different questions: one sets the desired outcome, while the other describes current monetary conditions used to pursue it.

Businesses may reconsider assumptions in multi-year pricing plans. Wages and procurement costs will not automatically grow at the same rate, however. For borrowers, the interest-fixing period and repricing rules in their own contracts remain decisive.

The meaningful test is whether actual price developments and expectations move towards the new objective. Persistent cost shocks or rising expectations could make that harder. The announcement changes the monetary policy framework; it does not promise a date when credit will become cheaper.